Tracking Ole Andreas Halvorsen's Viking Global Portfolio - Q1 2016 Update

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Includes: AET, AFL, AGN, AKRX, AMZN, ANTM, AON, APC, APD, AVGO, BABA, BHC, BIIB, BK, BKNG, BMRN, C, CB, CCI, CI, CMG, COG, CP, CPN, CTRP, DOV, DVA, DXCM, DYN, ECA, ECR, EDIT, ENDP, ETE, EVHC, FB, GOOG, GOOGL, GPOR, HAL, HD, HLT, HUM, JAH, JD, KITE, KSU, LH, LLY, LM, LNG, LYB, MA, MCD, MCK, MDVN, MET, MMC, MO, NFLX, NKE, NWL, PFE, PGR, PRQR, PRU, PXD, QUNR, RICE, RRC, SEE, SHPG, SIRO, STZ, SWN, TDG, TEVA, TMUS, TXT, UHS, VRTX, WBA, WCG, WUBA, XRAY
by: John Vincent

Summary

Halvorsen's 13F portfolio decreased from $26.52B to $22.72B. The number of positions decreased from 64 to 62.

Viking Global added Facebook, increased positions in Teva Pharmaceutical and Amazon.com, and dropped Valeant Pharmaceuticals during the quarter.

The top three positions are Alphabet Inc., Facebook Inc., and Amazon.com.

This article is part of a series that provides an ongoing analysis of the changes made to Ole Andreas Halvorsen's US stock portfolio on a quarterly basis. It is based on Viking Global's regulatory 13F Form filed on 05/16/2016. Please visit our Tracking Ole Andreas Halvorsen's Viking Global Portfolio series to get an idea of his investment philosophy and our previous update for the fund's moves during Q4 2015.

This quarter, Halvorsen's US long portfolio decreased 14.35% from $26.52B to $22.72B. The number of holdings decreased from 64 to 62. Largest five individual stock positions are Alphabet Inc., Facebook Inc., Amazon.com, Teva Pharmaceutical, and Broadcom Ltd., and they add up to 43.90% of the entire portfolio.

Ole Andreas Halvorsen is one of the most successful "tiger cubs" (protégés of Julian Robertson and his legendary Tiger Fund). To know more about "tiger cubs", check out the book, Julian Robertson: A Tiger in the Land of Bulls and Bears.

New Stakes:

Eli Lilly (NYSE:LLY): LLY is a fairly large 3.73% of the portfolio stake established this quarter at prices between $69 and $84. The stock currently trades at $74.81.

Facebook Inc. (NASDAQ:FB): FB is a huge 10.11% of the portfolio position. It was purchased this quarter at prices between $94 and $116 and the stock is now at $117. It is Viking's second-largest 13F stake.

JD.com (NASDAQ:JD): JD is a 1.76% of the US long portfolio position established this quarter at prices between $22.88 and $32.27. The stock is now near the low end of that range at $23.45.

Newell Brands (NYSE:NWL) formerly Newell Rubbermaid: NWL is a small 0.92% stake purchased this quarter at prices between $33.76 and $44.95 and the stock is currently at $47.14.

Aon Corp. (NYSE:AON), BioMarin Pharmaceutical (NASDAQ:BMRN), Cigna Corporation (NYSE:CI), Constellation Brands (NYSE:STZ), DaVita HealthCare (NYSE:DVA), DexCom Inc. (NASDAQ:DXCM), Dynegy Inc. (NYSE:DYN), Eclipse Resources (NYSE:ECR), Editas Medicine (NASDAQ:EDIT), Hilton Worldwide (NYSE:HLT), Home Depot (NYSE:HD), Jarden Corp. (NYSE:JAH), Medivation Inc. (NASDAQ:MDVN), MetLife Inc. (NYSE:MET), Progressive Corp. (NYSE:PGR), Sealed Air Corp. (NYSE:SEE), T-Mobile US (NASDAQ:TMUS), and United Health Services (NYSE:UHS): These are very small (less than ~0.5% of the portfolio each) stakes established this quarter.

Note 1: Aon Corp., Cigna Corporation, Constellation Brands, DaVita HealthCare, Hilton Worldwide, MetLife Inc., Sealed Air Corp., and T-Mobile US have all seen previous roundtrips in the portfolio.

Note 2: A regulatory 13G filing on 5/13/2016 shows Viking owning 6.34M shares (5.4% of the business) of Dynegy Inc.

Stake Disposals:

Broadcom Corporation (BRCM): BRCM was a large (top three) 7.36% of the portfolio stake purchased in Q3 2015 at prices between $47.19 and $53.80 and increased by 43% last quarter at prices between $50 and $58. In May 2015, Avago agreed to acquire Broadcom in a cash-and-stock deal and the transaction closed in January thus eliminating the position.

Priceline Group (PCLN): PCLN is a 1.89% of the US long portfolio position established last quarter at prices between $1,237 and $1,470. It was disposed off this quarter at prices between $974 and $1,351. The stock currently trades at $1,249.

Valeant Pharmaceuticals (VRX): VRX was the third-largest position at 5.96% of the US long portfolio as of Q4 2014. The stake was reduced by ~55% the following quarter at prices between $143 and $205. Last quarter saw a ~56% increase at prices between $70 and $182. The elimination this quarter was at prices between $26 and $102. The stock currently trades at $27.56. It was a long-term position that was established in 2010 when around 9.3M shares were purchased at around $20.

McKesson Corp. (NYSE:MCK), Nike Inc. (NYSE:NKE), Qunar Cayman (NASDAQ:QUNR), Textron Inc. (NYSE:TXT), and Vertex Pharmaceuticals (NASDAQ:VRTX): These small positions (less than ~2% of the portfolio each) were increased significantly last quarter. But the stakes were all sold out this quarter. The quick about-turn indicates a clear negative bias.

Aflac Inc. (NYSE:AFL), Dentsply International (NASDAQ:XRAY), Dover Corp. (NYSE:DOV), Energy Transfer Equity LP (NYSE:ETE), Monsanto Co. (NYSE:MON), ProQR Therapeutics (NASDAQ:PRQR), Sirona Dental (NASDAQ:SIRO), and WellCare Health Plans (NYSE:WCG): These are very small stakes (less than 0.5% of the portfolio each) eliminated this quarter.

Bank of New York Mellon (NYSE:BK) and Citigroup Inc. (NYSE:C): These small stakes (less than ~1.5% of the portfolio each) were reduced last quarter and disposed of this quarter.

Chipotle Mexican Grill (NYSE:CMG), Halliburton Company (NYSE:HAL), Kraft Heinz (NASDAQ:KHC), Legg Mason (NYSE:LM), and McDonald's Corporation (NYSE:MCD): These very small (less than ~1% of the portfolio each) stakes established last quarter were sold out this quarter.

Stake Increases:

Air Products and Chemicals (NYSE:APD): APD is a fairly large 4.38% of the US long portfolio position. It was first purchased in Q3 2014 at prices between $128 and $137 and increased by ~50% the following quarter at prices between $119 and $149. Q1 2015 saw a further ~46% increase at prices between $139 and $158. In Q2 2015, the pattern reversed: ~25% reduction at prices between $137 and $153. Last quarter saw a ~9% further selling. There was a ~28% stake increase this quarter at prices between $116 and $145. The stock currently trades at $141.

Amazon.com Inc. (NASDAQ:AMZN): AMZN is a large (top three) 8.98% of the US long portfolio stake established in Q2 2015 at prices between $370 and $446 and increased by roughly one-third the following quarter at prices between $429 and $548. Last quarter saw a ~15% reduction at prices between $512 and $694 while there was a one-third increase this quarter at prices between $482 and $676. The stock currently trades outside those ranges at $703. Halvorsen is sitting on huge gains.

Alphabet Inc. (NASDAQ:GOOG) (NASDAQ:GOOGL) previously Google: GOOG is the largest 13F position at 10.35%. It was established in Q3 2014 at prices between $563 and $596. Q1 2015 saw a huge 234% increase at prices between $493 and $575 and that was followed with another 57% increase the following quarter at prices between $524 and $565. Last quarter saw a ~18% reduction at prices between $608 and $777. The stock currently trades at $710. This quarter saw marginal buying.

Broadcom Ltd. (NASDAQ:AVGO) previously Avago Technologies: AVGO is a large top-five 6.69% of the portfolio stake established in Q2 2015 at prices between $117 and $148. It was increased by ~46% in Q3 2015 at prices between $109 and $138. The one-third stake increase this quarter was primarily due to the acquisition of Broadcom Corporation that closed in January. The stock is currently at $147.

MasterCard Inc. (NYSE:MA): MA is a 0.81% of the US long portfolio position. The original position was purchased in Q4 2011 at prices between $31 and $38 and the stake has wavered since. Recent activity follow: Q1 2015 saw a 92% increase at prices between $80.74 and $92.81 while Q3 2015 saw a one-third decrease at prices between $86.82 and $98.41. The position was almost sold out last quarter at prices between $90 and $102. This quarter saw the pattern reverse again: huge ~1,100% increase at prices between $80.65 and $97.36. The stock currently trades at $95.46.

Netflix Inc. (NASDAQ:NFLX): NFLX is a medium-sized 3.63% of the 13F portfolio stake established in Q3 2015 at prices between $93 and $126. It was increased by ~74% last quarter at prices between $97 and $131. The stock currently trades at $92.49. This quarter saw a marginal ~3% increase.

Teva Pharmaceutical (NYSE:TEVA): TEVA is a top-five position at 7.77% of the portfolio. The stake was established in Q3 2015 at prices between $55 and $72. Last quarter saw a ~182% increase at prices between $56 and $66 and that was followed with a one-third further increase this quarter at prices between $53.50 and $65.86. The stock currently trades below the low end of those ranges at $51.94. For investors attempting to follow Viking Global, TEVA is a good option to consider for further research.

Aetna Inc. (NYSE:AET), Ctrip.com International (NASDAQ:CTRP), and Kite Pharma (NASDAQ:KITE): These small stakes (less than ~2% of the portfolio each) were reduced last quarter but increased this quarter. AET saw a ~200% increase while CTRP was increased by ~80%. KITE had a marginal increase. AET, CTRP, and KITE are now at 1.91%, 1.25%, and 0.46% of the portfolio, respectively.

Note: Viking owns ~5% of KITE.

Cabot Oil & Gas (NYSE:COG), Encana Corp. (NYSE:ECA), Gulfport Energy (NASDAQ:GPOR), Range Resources (NYSE:RRC), and Southwestern Energy (NYSE:SWN): These four energy related stocks were very small positions as of last quarter. They saw huge increases this quarter and together they are now at ~10% of the 13F portfolio.

Chubb Corp. (NYSE:CB), Akorn Inc. (NASDAQ:AKRX), Calpine Corp. (NYSE:CPN), 58.com (NYSE:WUBA), Marsh & McLennan (NYSE:MMC), and Prudential Financial (NYSE:PRU): These are very small (less than ~1% of the portfolio each) positions that were increased this quarter. The position sizes are still too small to indicate a clear bias.

Stake Decreases:

Allergan plc (NYSE:AGN) previously Actavis: AGN was first purchased in Q2 2013 and more than doubled the next quarter at prices between $97 and $147. The stake was reduced by ~70% in Q1 2014 at prices between $177 and $221. Q3 2014 saw the position doubled at prices between $203 and $248, and that was followed by a ~80% increase in Q4 2014 at prices between $217 and $270. Q1 2015 saw an additional one-third increase at prices between $255 and $317. Last two quarters have seen a one-third reduction at prices between $266 and $323. The stock currently trades at $229.

Note 1: In November 2015, Pfizer Inc. announced the acquisition of Allergan plc in a deal valued at $160B. Allergan's shareholders were to receive 11.3 shares of a new company (the new business will be domiciled in Ireland - tax inversion deal structure) for each share held. The deal was terminated last month due to government pressure.

Note 2: Part of the increase in Q1 2015 was due to the acquisition of Allergan by Actavis. Viking Global held ~2M shares of Allergan for which they received around 725K shares of Actavis. Actavis plc was later renamed Allergan plc.

Anthem Inc. (NYSE:ANTM): 2.97% of the 13F portfolio, the ANTM stake was first purchased in Q2 2015 at the high-150s price-range. The following quarters saw consistent buying at lower prices with the share count increasing from 1.9M to 6.7M shares. The pattern reversed this quarter: ~28% reduction at prices between $117 and $144. The stock is now at $136.

Cheniere Energy (NYSEMKT:LNG): LNG was a 2.24% of the US long portfolio position as of last quarter. It was almost eliminated this quarter at prices between $23.65 and $38.47. The original stake was from Q3 2014 at prices between $70 and $84.29. The position was increased by ~83% in Q4 2014 at prices between $61.90 and $80.03 and another 55% the following quarter at prices between $66.61 and $81.40. Q2 2015 saw a ~27% reduction at prices between $68.49 and $79.78 while the following quarter saw a ~15% increase at prices between $48.50 and $70.65. Last quarter saw another ~22% increase at prices between $35.87 and $54.02. The stock currently trades at $33.85. Viking realized losses from this position.

Canadian Pacific Railway (NYSE:CP): CP is a 1.34% of the US long portfolio position that was established in Q4 2013 at prices between $123 and $157. Q2 2014 saw a 25% reduction at prices between $144 and $185, and the following quarter saw another one-third decrease in the $180 to $209 price-range. In Q4 2014, the pattern reversed as there was a stake doubling at prices between $175 and $215. Q1 2015 saw another ~53% increase at prices between $175 and $194. Q2 2015 had seen a ~15% trimming and that pattern continued the following quarter with a ~21% reduction at prices between $134 and $162. This quarter saw another ~43% reduction at prices between $104 and $135. The stock currently trades at $129.

LyondellBasell Industries (NYSE:LYB): LYB is a long-term stake first purchased in 2010. The original position was reduced by over one-third in Q3 2014 at prices between $97.65 and $115 and another 43% the following quarter at prices between $70.61 and $109. Q1 2015 saw an about-turn: ~90% increase at prices between $74.36 and $91.55. There was a further 39% increase the following quarter at prices between $87.80 and $106. Q3 2015 also saw a ~26% increase at prices between $77.25 and $104. The pattern reversed last quarter: ~31% reduction at prices between $83 and $98. The position was almost eliminated this quarter at prices between $72.34 and $88.60. It currently trades at $80.44.

Pioneer Natural Resources (NYSE:PXD): PXD is a 1.58% of the US long portfolio stake established in Q1 2014 at prices between $165 and $205. It was increased by almost 150% in Q2 2014 at prices between $181 and $233 and another two-thirds the following quarter in the $195 to $232 price-range. Last quarter saw a ~41% further increase at prices between $116 and $149. The pattern reversed this quarter: ~73% reduction at prices between $108 and $143. The stock is now at $164.

Walgreens Boots Alliance (NASDAQ:WBA) previously Walgreen Company: The 2.33% WBA stake was first purchased in Q4 2013 and substantially increased in Q1 2014 at prices between $53.80 and $69.09. Q2 2014 saw a turnaround as ~17% of the position was sold at prices between $63.40 and $76.08. Q1 2015 saw a ~23% decrease at prices between $73.75 and $88.23. In Q2 2015, the pattern reversed: ~69% increase at prices between $82.93 and $92.62. Last quarter saw a ~45% reduction at prices between $79 and $95 and that was followed with another ~51% reduction this quarter at prices between $72.91 and $85.16. The stock currently trades at $77.22.

Alibaba Group Holding (NYSE:BABA), Biogen Inc. (NASDAQ:BIIB), Crown Castle International (NYSE:CCI), Envision Healthcare (NYSE:EVHC), Humana Inc. (NYSE:HUM), Kansas City Southern (NYSE:KSU), Laboratory Corp. of America Holdings (NYSE:LH), Shire plc (NASDAQ:SHPG), and Transdigm Group (NYSE:TDG): These small stakes (less than ~1% of the portfolio each) were reduced further this quarter.

Anadarko Petroleum (NYSE:APC), Endo International plc (NASDAQ:ENDP), and Pfizer Inc. (NYSE:PFE): These are very small (less than ~0.5% of the portfolio each) stakes established last quarter but reduced this quarter.

Note: A regulatory 13G filing on 4/25/2016 shows Viking owning 10.13M shares (6.5% of the business) of Rice Energy (NYSE:RICE).

The spreadsheet below highlights changes to Halvorsen's US stock holdings in Q1 2016:

Disclosure: I am/we are long LNG.

I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

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